Answers · UK 2025/26

What is the best way to use the CGT annual exempt amount of 3,000 pounds in 2026/27?

The £3,000 CGT Annual Exempt Amount (AEA) is a use-it-or-lose-it allowance -- it cannot be carried forward. Use it each year by crystallising gains through the bed-and-ISA strategy (sell and rebuy inside an ISA), bed-and-spouse (transfer to a lower-rate partner), or simply by selling assets with gains up to £3,000 and rebuying at a higher base cost.

Last updated: 30 June 2026Last reviewed: 30 June 2026How we verify

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The Capital Gains Tax Annual Exempt Amount (AEA) is £3,000 for 2026/27 -- down from £12,300 in 2022/23 after two rounds of reductions. Every £1 of AEA you fail to use is permanently wasted. **Why the AEA matters** - Gains below the AEA are completely free of CGT - No reporting needed if total gains are below £3,000 (unless total disposals exceed £50,000) - The rate on gains above the AEA is 18% (basic) or 24% (higher/additional) for residential property, and 18%/24% for most other assets from October 2024 - Each individual gets their own £3,000 (couples have £6,000 combined) **Strategy 1: Bed-and-ISA** The most powerful annual CGT planning tool: 1. Sell shares/funds with gains up to £3,000 outside your ISA 2. Immediately repurchase the same assets inside your ISA (using your £20,000 annual ISA allowance) 3. Future gains and income inside the ISA are permanently free of tax 4. The "30-day rule" (which prevented immediate rebuying) applies to selling and rebuying in the SAME account -- moving to an ISA avoids this restriction **Strategy 2: Bed-and-spouse** Transfer assets to your spouse or civil partner at no gain/no loss, then the spouse sells: - Uses both individuals' AEA (£6,000 combined) - If the spouse is a basic-rate taxpayer, gains are taxed at 18% rather than 24% - Must be a genuine gift -- not a repurchase arrangement **Strategy 3: Timing across tax years** If you have a large gain to realise, split the disposal across two tax years (before 5 April and after 6 April) to use two years' AEA: - £3,000 AEA in year 1 + £3,000 AEA in year 2 = £6,000 sheltered **Crypto and digital assets** CGT applies to cryptocurrency in the same way as shares. Using the £3,000 AEA on small crypto gains each year is particularly important as crypto positions can grow quickly in value. **What the AEA does not apply to** - Income: the AEA is CGT-specific; dividends and interest are taxed as income - Cars (exempt from CGT) - Your main home (Private Residence Relief usually applies) - Personal possessions under £6,000